BRICS bank to take centre stage at Summit

Lullu Krugel, Senior Economist at KPMGAhead of the BRICS summit that will take place at the end of this month, various debates are taking place internationally concerning this year’s summit agenda. Last year’s summit had discussions revolving around food security amongst member states, various financing schemes and ensuring robust economic growth by strengthening trade links. The Economist caught up with Senior Economist at KPMG, Lullu Krugel, to discuss various topics that will be grappled by the representative ministers from the participating countries. During the interview, it appeared that one topic remains prominent: the BRICS bank.
“The so-called BRICS bank was tabled for the first time at the 2012 BRICS Summit in March last year. The bank is to be formed by pooling funding from member countries. The bank will provide funding for infrastructure projects, lending and to intervene in the case of future global financial instability,” explained Krugel. “The previous World Bank president initially opposed to the idea  eventually acknowledged the creation of the Bank. He added though that not having Russia and China as part of the World Bank system would be a “mistake of historic proportions”.Given that a BRICS bank would represent close to 30% of the global GDP through its members, such a bank could rival the International Monetary Fund and the World Bank. That might be part of the reason why the World Bank has changed its initial stance towards one of supporting such a BRICS bank and “welcoming cooperation” with such an institution.”